Financial Independence (FIRE) Calculator
Simulate your journey to financial freedom using the 4% Safe Withdrawal Rule, compound interest from Moat Compounders (~12%), and real estate cashflow.
⚙️ Your Financial Parameters
💡 How Portfolio CAGR Accelerates Your Freedom
Investing at 12.0% CAGR accelerates your retirement by 6.2 years compared to a standard 7.0% index fund (16.6 yrs vs 22.8 yrs).
🪜 Compounding Milestones to Freedom
@ 12.0% CAGRUnderstanding the FIRE Math & The 4% Rule
How compound interest, wide economic moats, and safe withdrawal rates build generational independence.
🎯 What is the 4% Safe Withdrawal Rule?
Originating from the landmark Trinity Study, the 4% rule states that an investor can withdraw 4% of their initial portfolio value in year one of retirement (adjusted for inflation each subsequent year) with a 96%+ historical probability of never running out of money over a 30-year horizon. This equates to needing 25× your annual living expenses.
🚀 Why does Portfolio CAGR make such a huge difference?
Compounding is non-linear. Earning 12% CAGR instead of standard 7% index returns doesn't just increase gains by 5%—over a 15-year period, $10,000 at 12% grows to $54,735 vs only $27,590 at 7%. That extra alpha nearly doubles your accumulated wealth and shaves 5 to 10 years off your working career.
🏰 What is a Wide-Moat Compounder?
As pioneered by Warren Buffett and Charlie Munger, companies with wide economic moats (pricing power, high switching costs, brand monopolies, and network effects) generate consistently high Return on Invested Capital (ROIC > 15%). These businesses sustainably compound intrinsic value above broader market indices over decades.
🏠 How does Real Estate Cash Flow reduce your FIRE number?
Every dollar of steady passive real estate cash flow reduces your reliance on liquid equities. For example, $1,000/month ($12,000/yr) in net rental income directly subtracts $300,000 from your required liquid stock portfolio target ($12,000 × 25).